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Case highlights flaws in landlord, tenant rules

A decision of Justice Ted Matlow in the Ontario Superior Court last month (http://canlii.ca/t/fs7sn) contains valuable lessons for residential landlords and tenants, along with a strong message for the Ontario government, the Landlord and Tenant Board and the officials charged with making rules for Ontario courts.

Melissa D’Amico owns a small building in the Kensington Market area of Toronto. Last October, she rented an apartment in the building to Rony Hitti and his spouse Anastassia Adani for a monthly rent of $3,600. The couple moved in immediately but refused to pay any rent at all.

A month later, D’Amico started an eviction action at the Landlord and Tenant Board, but discontinued it when the tenants offered a cheque for all of the arrears. When the cheque bounced in December, the landlord’s agent started another eviction action. At the hearing in late January, the landlord and tenant agreed to an order which provided for an automatic eviction if the tenants did not pay their $12,000 rent arrears within 11 days.

Hitti gave D’Amico an uncertified cheque for the outstanding amount. He then swore an affidavit stating that the rent had been paid in order to cancel the landlord’s eviction order, which was in the hands of the sheriff.

This cheque also bounced, allowing D’Amico to obtain an order from the board reinstating the eviction. Instead of moving out or paying the arrears, the tenants appealed that order, and the effect of the appeal was to stay the eviction.

When the appeal came before Matlow for a hearing in July, the tenants were still in possession and had not paid the landlord any rent. By then, the arrears exceeded $25,000.

At the hearing, Matlow ordered the tenants to be evicted and to pay rent arrears, plus the landlord’s full costs of $13,072.12. The judge concluded that the tenants’ appeal “raised no bona fide question of law, (and) that it was totally devoid of merit, vexatious and an abuse of (court) process.”

Hitti apparently had a similar experience with a previous landlord in 2009, in which he initiated “frivolous appeals to obtain rent-free housing,” according to D’Amico.

In his written judgment last month, Matlow wrote: “My recent experience sitting as a single judge of this court to hear motions has convinced me that there is a growing practice by unscrupulous residential tenants to manipulate the law improperly, and often dishonestly, to enable them to remain in their rented premises for long periods of time without having to pay rent to their landlords. It is practice that imposes an unfair hardship on landlords and reflects badly on the civil justice system in Ontario. It calls for the government, the Landlord and Tenant Board and this court to respond.

“I have chosen this case, which is one of many similar cases that came before me during a five-day period hearing motions, as an example of the problem that I describe. I could easily have chosen many others.”

A few personal observations may be in order at this point:

• Deadbeat tenants should be aware that Ontario’s courts are becoming more vigilant to abuses of the system. If Matlow’s decision is any indication, the courts will not hesitate to award heavy costs penalties in cases like this.

• Landlords should never hand over keys without a certified cheque or cash for the first and last months’ rent.

• Landlords should always check tenant references and credit history.

• Past decisions of the Landlord and Tenant Board should be made public so that stakeholders can check out prospective landlords and tenants.

• The impossible situation in which D’Amico found herself could be remedied with a minor change in the Residential Tenancies Act. Matlow concluded his reasons with these words: “It is my hope that those in a position to amend the rules of this court will consider this judgment and see fit to restrict the right of appeal in residential landlord and tenant cases and, perhaps, require that leave to appeal be obtained before appeals can be brought.”

Bob Aaron is a Toronto real estate lawyer. He can be reached at www.aaron.ca.

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